KUALA LUMPUR – Air passengers may be forced to pay higher fares if the proposed takeover of Sultan Abdul Aziz Shah Airport, better known as Subang airport, by a private business entity goes through.
The Public Transport Users’ Association (4PAM) said the economies of scale enjoyed by Malaysia Airports Holdings Bhd (MAHB) cannot be duplicated by a single airport operator, and that the operating cost will eventually be passed on to customers if the bid succeeds.
Its president, Ajit Johl, said at the moment, even MAHB has to cross-subsidise some of its loss-making airports to provide air connectivity across the country.
The government-run airport operator currently manages 39 airports in Malaysia.
“The aviation sector is not expected to recover until 2025, so how is a single airport operator going to survive and provide the cross-subsidies?” said Ajit in a statement today.
“The (takeover) proposal is akin to picking the crown jewels, or asset-stripping, of a successful organisation, instead of capitalising on each organisation’s core competencies.”
Earlier this month, The Vibes reported that real estate and construction company WCT Holdings Bhd, via its subsidiary, Subang Skypark Sdn Bhd, is proposing to acquire and operate Subang airport until 2092.
The proposal has been presented to the Transport Ministry, with an estimated RM3.7 billion in initial investment, of which RM1.7 billion is for passenger and executive jet terminals, and RM2 billion to be spent over the next 10 years to develop an airport city.
The ministry has said any proposal to redevelop the hub is still preliminary and the matter will be decided by the cabinet, adding that it is not uncommon for the government to receive proposals to expand new or existing assets.
Ajit said 4PAM is equally concerned about the risk and impact of a city airport and its surrounding development, particularly in a mature area like Subang.
Citing examples in foreign countries, he said a new city airport could bring down the value of the surrounding land and properties due to noise and pollution.
“The idea to redevelop the whole area into malls and commercial business parks without an experienced airport operator could bring disastrous results, or even the closing of a historic airport that is currently profitable.”
Instead, he said, MAHB should continue pursuing its initial plan in 2018 to develop the airport as an aviation and aerospace ecosystem through the Subang Airport Regeneration master plan.
“We encourage developers to come forward and work with MAHB, as the master developer of this huge real estate potential, and make it a strategic airport, aviation and aerospace ecosystem that will become the pride of the country.
“Finally, the redevelopment should not go into the hands of a single organisation, as that by itself is a huge risk, and we have seen that.” – The Vibes, May 21, 2021
